As expected, the Obama administration filed
a petition for certiorari asking the Supreme Court to review and overturn the
decision by the U.S. District Court for the D.C. declaring President
Obama's recess appointments to the National Labor Relations Board ("NLRB"),
which took place the same day as Richard Cordray's recess appointment as
Director of the CFPB, unconstitutional. In Canning v. NLRB, No. 12-1115
(D.C. Cir. Jan 25, 2013) [an enhanced version of this opinion is available to lexis.com
subscribers], the court invalidated President Obama's recess
appointments because the Senate was not technically in recess. The court held
that (1) the President may exercise recess power only in recesses between
Senate sessions ("inter-session"), instead of those falling within Senate
sessions ("intra-session"); and (2) that the vacancies to be filled must also
first arise during that recess. As readers of this blog know, Senate
Republicans have seized
on the Canning decision in challenging Director Cordray's appointment, as well
as the entire structure of the CFPB.

In the government's cert petition, U.S. Solicitor General
Donald B. Verrilli, Jr., argues that the lower court's decision, "repudiates
understandings of the Recess Appointments Clause that have been maintained and
relied on by the Executive for most of the Nation's history. The
limitations imposed by the court of appeals would render many of the recess
appointments since the Second World War unconstitutional." Given the late date,
it is unlikely that, if the Supreme Court agrees to accept the case, that it
will be heard before the Court's next term beginning in October.

Since the Canning decision was announced in
January, the CFPB has repeated
the mantra: "CFPB is not a party to the Noel Canning case, and that ruling
has no direct effect on the bureau. The bureau continues its essential work of
protecting American consumers." The CFPB may be singing a different tune if the
Supreme Court accepts cert and affirms the decision in Canning. Until
then, Director Cordray has his own challenge to worry about.

Pending before the D.C. Circuit is a separate challenge
to Cordray's recess appointment (State National Bank of Big Spring v. Wolin
(No. 12-cv-1032), which has been joined
by the attorneys general of several state. That case, however, may not survive
a motion to dismiss challenging the plaintiff's standing to the maintain the
action: none of the plaintiffs have been or will be subject to any actions by
the CFPB. Stay tuned to the CFPB-Lawblog as we follow this developing story.